The principal here is the same, except that the reason for additional capital being tied up is an increase in prices, and vice versa. We have previously seen that the effect of a rise in raw material prices is to reduce the rate of profit and vice versa.
“This is absolutely true for capital newly invested in a business enterprise, in which the investment, i. e., the conversion of money into productive capital, is only just taking place.” (p 111)
In fact, as was seen in Volume II, in examining the way M' divides into M and m, it is also absolutely true of m in so far as it is accumulated. What was seen there was that M is only the money equivalent of P the productive-capital value. If the value of P rises or falls then M rises or falls with it, so that when the M buys P once more, it is able to buy the same physical quantity, so reproduction continues.
However, that is not the case with m, which enters the circuit of capital for the first time here as newly invested money-capital. Its ability to purchase P is wholly determined by the values of P that now confront it. If the prices of the commodities that comprise the productive-capital have risen, it will buy less and vice versa. But, in practice, because of the simultaneous and continuous nature of capitalist production, things are more complicated than this. A portion of capital is employed in each of its three circuits.
“... a large portion of the already functioning capital is in the sphere of circulation, while another portion is in the sphere of production. One portion is in the market in the shape of commodities waiting to be converted into money; another is on hand as money, in whatever form, waiting to be reconverted into elements of production; finally, a third portion is in the sphere of production, partly in its original form of means of production such as raw and auxiliary materials, semi-finished products purchased in the market, machinery and other fixed capital, and partly in the form of products which are in the process of manufacture.” (p 111-2)
How appreciation and depreciation affect the value of this capital depends on where it is. In short, all of the capital that is in the form of productive-capital through to commodity-capital, waiting to be sold, will be revalued accordingly. The realised money-capital, including all that in the process of being paid, i.e. invoiced and awaiting payment in cash or credit, will not.
In practice, and in terms of prices rather than values, again things are more complicated. Competition may cause market prices to diverge from the values depending upon the quantity of commodities pressing on the market. Moreover, the assumption here is that demand does not change in the face of changed prices. These complications will be considered later. At the same time, even when goods have been invoiced and payment is awaited, it may be the case that prices may be adjusted post facto. The law of contract allows a party to void an agreement due to force majeure. If conditions facing a supplier have changed so significantly and unforeseeably as to make it unreasonable for them to fulfil their obligations they can avoid doing so. In the same way, in an era of large, regular oil price rises, it was common for airlines to impose fuel price surcharges between the time flights were booked, and the flight being taken.
However, all these represent obstacles in the way of understanding the real value relations, and should be considered separately for that reason. Considered from the perspective of value, then, if the labour-time required rises for the production of any of these commodities, that make up the productive-capital or commodity-capital, then its value rises irrespective of what was paid for it, “because it comes to represent more labour-time in retrospect and thus adds more than its original value to the product which it enters, and more than the capitalist paid for it.” (p 112)
The consequence of this, depending upon the particular conditions for different capitalists, is that some may obtain a capital gain or loss, depending upon whether these prices rise or fall, and depending on whether the particular capitalist has a lot of capital tied up as money-capital or commodity-capital. A capitalist with a large amount of capital in the form of productive-capital or commodity-capital will receive a capital gain if the prices of their raw materials rise, because this rise will be reflected in the selling price of their own commodity. If they were to sell the business, they could realise this gain. But, in general, the assumption is of the reproduction of the capital. In that case, this apparent capital gain is ephemeral, because it disappears as soon as they come to replace their raw materials at the now higher price. Moreover, to the extent that they come to accumulate their surplus value, it will now be able to buy less productive-capital.
They will, however, for that same reason, be in a better position than the capitalist entering this business for the first time, or the capitalist who had already sold a large proportion of their commodity-capital at the old price. For, both of these will, in reality, have suffered a capital loss because the value of their money-capital has fallen relative to the value of the productive-capital they need to buy.
Moreover, as Marx points out elsewhere, if they sell their business as a business, then their capital gain is negated by the capital loss suffered by the buyer of the business. The buyer of the business now finds that the money-capital they owned, has been devalued to the equal extent of the increase in the value of the commodities that comprise the capital of the business they are buying.
No comments:
Post a Comment